DoJ charges two men for operating $25m AI crypto ponzi scheme

The U.S. Department of Justice (DoJ) has charged an Australian national and a California man with operating a $25 million crypto ponzi scheme.

In a press release on Dec. 12, 2023, the DoJ said the two men, identified as David Gilbert Saffron of Australia and Vincent Anthony Mazzotta Jr. of California, allegedly operated a fraudulent scheme by promising investors to employ an artificial intelligence (AI) automated trading bot to trade victims’ funds in crypto and earn high-yield profits.

However, instead of investing victims’ funds in crypto, the two men allegedly misappropriated victims’ funds to “pay for personal expenses including private chartered jet flights, luxury hotel accommodations, private mansion rentals, a personal chef, and private security guards,” the DoJ says.

According to the regulator, Saffron often solicited victims under various aliases, including David Gilbert, the Blue Wizard and Bitcoin Yoda, in an effort to conceal his identity. Moreover, to conceal the location of victims’ crypto funds, the defendants used crypto mixers.

Saffron and Mazzotta are accused of multiple criminal offenses, including conspiring to commit wire fraud and money laundering. If found guilty, they each face a potential prison sentence of up to 20 years for each charge of conspiracy to commit wire fraud and money laundering as well as 20 years for each wire fraud charge, 10 years for each money laundering charge, and five years for conspiring to obstruct justice. Saffron additionally faces up to 10 years in prison, to be served consecutively to any other sentence, for committing felonies while on pre-trial release, the press release reads.